Comprehensive vs Zero Depreciation Policy: What’s the Difference?

Buying a third-party motor insurance policy for your car in India is a requirement according to the Motor Vehicles Act, 1988. However, if you carefully consider your options, it might be more suitable for you to purchase a comprehensive policy replete with add-ons. Once you begin considering options other than third-party car insurance, you may come across options such as zero depreciation cover. What is zero depreciation cover? Is it different from a comprehensive policy? If so, how? Let’s find out.

What is Comprehensive Car Insurance?

The term ‘comprehensive’ signifies inclusivity. If you seek to understand this type of car insurance through its name, you may note that it is a policy that offers a bouquet of multiple fundamental policies. Usually, your comprehensive insurance includes third-party liability cover as well as own damage cover. Furthermore, you are also given the option of adding a personal accident cover to this bouquet, if you don’t already have one. One is required to have some form of personal accident cover if they are buying  car insurance online or offline. Thus, a basic comprehensive insurance policy is more than a third-party insurance and can be enhanced further by choosing add-ons. One of these add-ons is zero depreciation cover.

What is Zero Depreciation Cover?

Imagine a situation where you want to claim your own damage cover. This would be a situation where your car is damaged due to some mishap and needs repairs. If you own a vehicle, you are probably aware that the value of your vehicle as well as the value of its parts depreciates over time. Thus, in a situation where you are required to claim your own damage cover, you may receive only the value after depreciation. Thus, the older your vehicle, the more it has depreciated and the lesser the pay-out you will receive. If you want to avoid this and receive the full value of your vehicle or its parts as an insurance pay-out, you may want to consider zero depreciation cover. To put it simply, a zero depreciation policy is what protects the value of your vehicle against depreciation. Here are a few things to know about zero depreciation cover.

1. A zero depreciation policy is usually not available as a standalone policy, but rather as an add-on cover. You may not be able to buy it separately or with a third-party liability policy alone. Instead, you can add it to your comprehensive coverage.
2. Typically, a zero depreciation cover is available only for the initial few years of the life of your car. However, if you have been buying zero depreciation consistently since the time you purchased the vehicle, you may be able to get it for the rest of the years as well. Furthermore, even if you haven’t been purchasing it consistently, the insurance provider may offer you the option to get it if you agree to a car inspection.

Getting your car inspected may extend the time taken to make the policy purchase. However, if you are keen on zero depreciation car insurance, that may be the only option available. *Standard T&C apply

Differences Between Zero Depreciation and Comprehensive Car Insurance

One of the aspects to note about zero depreciation is that it is available as a part of comprehensive coverage. Thus, the scope of coverage of your comprehensive car insurance changes depending on whether zero depreciation coverage is included or not. Here is a look at the key differences between zero depreciation cover and comprehensive car insurance coverage.

Zero Depreciation Cover	Comprehensive Car Insurance
Is an add-on coverage to be purchased with a comprehensive plan	Is a bouquet of multiple covers offered as a single policy
Coverage for depreciation alongside other coverage offered by a comprehensive policy	Comprehensive coverage without add-ons offers third-party liability, own damage, and personal accident coverage
Adds to the premium of comprehensive insurance	Premium will fluctuate based on the add-ons included
Policyholder can expect full pay-out for the cost incurred	Pay-out will depend on the depreciation of the vehicle
May not be available for all vehicles	Is available for most vehicles, irrespective of age

*Standard T&C apply

Should You Opt for a Zero Depreciation Cover?

Buying zero depreciation car insurance online or offline can certainly increase the scope of your comprehensive insurance plan. However, there are two factors to be considered when buying any such add-on to your motor insurance. Of these, the first is whether the add-on is available to you. With zero depreciation cover, the age and health of your car play a role in determining eligibility for this cover. The second of these is whether this cover is affordable to you. Including an add-on can slightly increase the premium of your comprehensive coverage. Check with a car insurance premium calculator whether the new premium is within your budget.   *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.